Industry in Punjab has much to introspect about as a recent series in this newspaper focussed on. The state’s biggest scourge is its extravagant, self-serving political class and bureaucracy that divert limited resources from the development of industry, agriculture, health, education and infrastructure to finance an inefficient, top-heavy administration. Mega projects get entangled in red tape. Corruption has crippled concepts like single-window clearances. Politicians and officials extort money from industrialists and traders, who, in turn, resort to tax evasion and power pilferage. It is a vicious cycle.
An industrial policy on paper makes no sense when the political leadership is bent upon destroying the state power utilities by giving free power to farmers, adjusting its dues against loans and raising the cost of power for industry. Not only is power availability inadequate, but the quality is also poor. The state allocation for power has actually fallen in the latest state budget. The government is relying heavily on the private sector’s coal-run power plants disregarding the cost, which can become prohibitive if global oil prices keep rising. The state has failed to tap its potential for biomass power. Lack of quality and competitively priced power will continue to ail industry in Punjab.
Punjab’s geographical location is a disadvantage which can be overcome if the political leadership pushes for greater land-route trade with Pakistan, Afghanistan and beyond. The state leadership has failed to pursue the dedicated rail freight corridor. Though the tax collection has accelerated with the VAT, the additional revenue generated has not gone into any development work. On the contrary, government land is auctioned to meet the day-to-day expenditure. The high cost of land is another deterrent to industry. While the government must provide adequate infrastructure and create a level-playing field and a congenial environment for industry to grow, there is no need to prop up inefficient, loss-making units. Let the fittest alone survive. Industrialists have got used to state crutches. Like Gujarat, the Punjab leadership must aim at offering “minimum government, maximum governance”.
An industrial policy on paper makes no sense when the political leadership is bent upon destroying the state power utilities by giving free power to farmers, adjusting its dues against loans and raising the cost of power for industry. Not only is power availability inadequate, but the quality is also poor. The state allocation for power has actually fallen in the latest state budget. The government is relying heavily on the private sector’s coal-run power plants disregarding the cost, which can become prohibitive if global oil prices keep rising. The state has failed to tap its potential for biomass power. Lack of quality and competitively priced power will continue to ail industry in Punjab.
Punjab’s geographical location is a disadvantage which can be overcome if the political leadership pushes for greater land-route trade with Pakistan, Afghanistan and beyond. The state leadership has failed to pursue the dedicated rail freight corridor. Though the tax collection has accelerated with the VAT, the additional revenue generated has not gone into any development work. On the contrary, government land is auctioned to meet the day-to-day expenditure. The high cost of land is another deterrent to industry. While the government must provide adequate infrastructure and create a level-playing field and a congenial environment for industry to grow, there is no need to prop up inefficient, loss-making units. Let the fittest alone survive. Industrialists have got used to state crutches. Like Gujarat, the Punjab leadership must aim at offering “minimum government, maximum governance”.
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